Four things you need to know about what it's like to buy or sell a business

Ahead of Insider's SME Conference later this month, legal firm MacRoberts outlines some of the key hurdles and opportunities for those looking to grow their business by acquisition or thinking about exiting their firm

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A team from the legal firm will present an innovative and informative interactive deals workshop in a session tailored to answer questions like those above for everyone who's present.

But ahead of the workshop, here they outline some some of the key hurdles and opportunities for those looking to grow their business by acquisition or those thinking about exiting their firm.

What are the main hurdles I need to overcome?

Every business owner needs to ask two important questions:

Where is the exit door and how do I open it?

Unfortunately, too many owners don’t know the answers to these questions. Many don’t even know that these questions are so important.

There are a number of understandable reasons for this. Perhaps the most common hurdle is: I am too busy trying to run the business to think about exit?

Like any excuse based on not enough time, the issue is one of priorities. It is often not high enough up on the agenda. The danger is that it never becomes high enough until it is too late. The first step is recognising that these questions are important.

Consider these five important issues

Take some time to consider potential exit strategies – if you don’t know the exact location of the exit door, at least work out which floor it is on and who might be on the other side of the door.

If you can identify an exit strategy (or strategies) make sure those strategies inform the ongoing decisions taken in the business.

If you have competing interests amongst different business owners try to avoid letting them fester so that resentment grows and positions become more entrenched.

Value is only one aspect of exit. Focusing on the right exit strategy will drive value.

Try to run your business with one eye on the exit door – what will the potential buyers be looking for when they take over the business?

What does the process of selling or buying a business actually involve?

Once the owner of a business has overcome the obstacles that lie in their way to the exit door, what is actually involved in going through that door?

Businesses that have previously been on a “buy and build” strategy will be well used to the acquisition process but many owners will only ever be involved in one sale or acquisition process.

Business owners in this situation rely heavily on friends and contacts that have been through the process before. In many cases, those friends and contacts can paint an unflattering picture!